Notices of AGM – be aware of increases in ASIC fees
Corporate News - 21 September 2018
On and from 4 July 2018, ASIC moved to a ‘user-pays’ model, which has resulted in an increase in the fees payable for lodgement of certain documents and applications with ASIC.
It is not unusual for clients, as part of the notice of annual general meeting, to seek approvals for the issue of financial benefits (including shares, options or performance rights) to related parties that have required the lodgement of the notice of annual general meeting with ASIC. As clients may recall, under Chapter 2E of the Corporations Act 2001 (Cth), the grant of a financial benefit to a related party can only be completed with the approval of the company’s shareholders, unless one of the relevant exceptions in Chapter 2E applies. A notice of meeting seeking approval for the grant of a financial benefit to a related party needs to be lodged with ASIC, and ASIC has 14 days to review the notice of meeting. A fee can be paid to shorten that 14 day review period.
Ahead of the preparation of the notices of annual general meeting for companies with a 30 June year end, we thought it pertinent that clients be aware of the change in fees for lodgement of documents with ASIC containing resolutions seeking approval for the grant of a financial benefit:
- Lodgement of a notice of meeting for a related party benefit - $802 (up from $37)
- Application for approval to shorten the ASIC review period - $3,487 (up from $37)
This increase in fees could add considerable cost to clients and it is therefore important for clients preparing notices of annual general meeting containing resolutions to approve the issue of shares, options, performance rights or other financial benefits to directors to be aware of the cost and implication on timing, and to seek advice as to whether there are any ways to avoid these costs.